Bush Signs $5.7 Billion Extension for Unemployment Benefits
Bush signed an extension of jobless benefits into law just before 8 a.m., as he was preparing to leave the White House for a morning flight to Lima, Peru, to attend the 21-nation Asia-Pacific Economic Cooperation forum.
Congressional leadership rushed the bill to the White House after it was approved Thursday to make the unusually quick bill signing possible before Bush left the country.
Later Friday, the Federal Deposit Insurance Corp. is expected to formally approve a plan to provide insurance for loans between banks for more than three years, guaranteeing the new debt in the event the issuing bank failed or its holding company filed for bankruptcy. The guarantees under the program, part of the government's financial rescue plan aimed at breaking the crippling logjam in bank-to-bank lending, could reach as much as $1.4 trillion.
Meanwhile, the Dow Jones industrials rose about 50 points Friday morning, after dropping more than 400 points on each of the two previous days to reach the lowest level in more than five years. In part, investors were discouraged by the inability of the White House and Congress to agree on a plan to provide relief to the battered auto industry.
Democrats had sought to carve out $25 billion from the $700 billion financial rescue plan to keep the auto industry in business through next spring, but the White House and Senate Republicans objected.
Earlier in the year, Bush also expressed doubts about further benefit extensions, but he came to support the legislation as new figures showed new claims for jobless aid had reached a 16-year high.
In what could be its last vote of the year, the Senate approved a measure Thursday that would provide up to three months of extra benefits for those whose unemployment benefits have run out or are about to expire. The House passed the bill in October.
"With more Americans filing jobless claims than at any time since the 1992, the Senate's passage of the House's unemployment insurance extension legislation will help speed relief to more than 2 million workers who continue to search for new jobs in these difficult economic times," said House Speaker Nancy Pelosi, D-Calif.
Democratic leaders said they were ready to come back into session on Dec. 8, but only if the Big Three automakers first come up with a roadmap showing how federal aid will put them on the path to future economic viability.
At stake are millions of jobs in the auto and related industries that could go under if one or more of the major automakers goes bankrupt.
"We are prepared to come back into session the week of Dec. 8 to help the auto industry," said Senate Majority Leader Harry Reid, D-Nev. "But only if they present a responsible plan that gives us a realistic chance to get the needed votes."
Other federal actions to resuscitate an economy crippled by home foreclosures, a credit freeze and confusion in financial markets will probably have to wait until January.
President-elect Barack Obama has pledged to make economic recovery the immediate focus of his new administration and both the House and Senate will have increased Democratic majorities eager to support him.
The voice vote in the Senate Thursday came just hours after the Labor Department reported that claims for unemployment benefits jumped last week to 542,000. That marked the highest level since July 1992 and provided fresh evidence of a rapidly weakening job market that is expected to get even worse next year. The number of people searching for work has now topped 10 million and the civilian unemployment rate now stands at 6.5 percent, a 14-year high.
About 1.2 million people would exhaust their unemployment insurance by the end of the year without the extension, sponsors said. The measure is estimated to cost about $5.7 billion, although economists put the positive impact at $1.64 for every dollar spent on jobless benefits because the money helps sustain other jobs and restores consumer confidence.
"Extending this basic assistance to help unemployed workers pay their mortgages, feed their families, and heat their homes is a down payment on broader economic recovery legislation that our economy desperately needs," said House Ways and Means Committee Chairman Charles Rangel, D-N.Y.
The legislation as approved would provide seven additional weeks of payments to people who have exhausted their benefits or will exhaust them soon. Those in states where the unemployment rate is above 6 percent would be entitled to an additional 13 weeks above the 26 weeks of regular benefits. Benefit checks average about $300 a week nationwide.
The benefits provided would be in addition to 13 weeks of federally funded extended benefits Congress approved last June.
Congress has enacted federally funded extensions seven times in the past 50 years during economic slumps - in 1958, 1961, 1972, 1975, 1982, 1991 and 2002.
The White House had earlier opposed a broader $61 billion bill that would have helped states meet Medicaid costs and fund public works projects as well as extend jobless benefits.
But on Thursday White House press secretary Dana Perino urged Congress to move quickly on the benefits bill. "The recent financial and credit crisis has slowed the economy, and it's having an impact on job creation," she said.
Unemployment insurance is a joint program between states and the federal government that is almost completely funded by employer taxes, either state or federal.